S&P 500 futures pull back slightly from record ahead of economic data, Fed summit

A trader works on the floor at the New York Stock Exchange (NYSE) in New York, August 20, 2021.

Andrew Kelly | Reuters

S&P 500 futures were lower on Wednesday following the benchmark’s rally above the 4,500 level for the first time ever in the prior session.

S&P 500 futures lost 0.1% and Nasdaq 100 futures were down 0.2%. Dow Jones Industrial average futures were flat.

Weekly jobless claim data will be released at 8:30 a.m. ET on Thursday. Economists polled by Dow Jones are expecting 350,000 Americans filed for unemployment last week, compared to the prior week’s 348,000. Investors will also get the second estimate for GDP last quarter. Economic growth totaled 6.7% in the second quarter, according to Dow Jones estimates, a slight revision upward from the 6.5% annual increase previously reported.

The highly anticipated Jackson Hole symposium from the Federal Reserve will be held virtually this year on Friday, with many central bank speakers making remarks to the media beginning Thursday. At the event, central bankers could provide updates on their plan around tapering monetary stimulus.

Shares of Salesforce rose 2% in premarket trading after the software giant reported fiscal second-quarter earnings and forward guidance that exceeded analysts’ estimates. Ulta Beauty rose 5% on strong results.

On Wednesday, the S&P 500 gained 0.22% to close at a record, led by stocks that benefit from the economic reopening like airlines, cruise lines and financials. The 500-stock average crossed the 4,500 threshold for the first time ever on Wednesday, but closed below that level. The benchmark is up 105% from its pandemic low.

The Nasdaq Composite rose 0.15%, also notching a record close. The Dow Jones Industrial Average rose 39 points.

“While we remain believers in the secular bull market for US equities, we have suggested raising some cash in U.S. equities given lower highs (aka bearish divergences) across a variety of indicators, weaker August-October seasonality, the Presidential Cycle moving into its weakest period and bearish signals from margin debt,” wrote Stephen Suttmeier, technical research strategist at Bank of America.

The yield on the benchmark 10-year Treasury note rose as high as 1.352% Wednesday as concerns about slowing growth from the delta variant eased, hitting its highest level since earlier in the month when it yielded as much as 1.364%.

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“The 10-year Treasury bond yield has continued rising in recent days and exploded higher in [Wednesday’s] trading, sending a strong message that the Delta variant of Covid may be peaking in the U.S. which should improve confidence, restart economic reopenings, and drive investment flows toward small caps and cyclicals,” said Jim Paulsen, chief investment strategist at the Leuthold Group.

Chairman Jerome Powell is slated to make remarks on Friday as part of the Fed’s summit. The Federal Reserve has been purchasing at least $120 billion of bonds per month to curb longer-term interest rates and jumpstart economic growth in reaction to the pandemic.

“Expect investors to keep an eye on the Fed’s symposium the rest of this week for any comments about tapering or timing for interest rate hikes,” said Paulsen. “Either unexpected commentary from the Fed or a failure or success in scaling 4500 could bring additional volatility to the stock and bond markets.”

Several companies report quarterly earnings on Thursday including Dell Technologies, Gap, HP and Abercrombie & Fitch.

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